May 18, 2023

Automotive Customer Loyalty Programmes: Guidance with Examples

The automotive industry is firing on all cylinders.

That's if the latest figures are to be believed, anyway. Last year alone, over 775,014 cars, 101,600 commercial vehicles and 1.5 million engines were built in the UK. Furthermore, eight out of 10 cars that are produced in the UK are currently being exported overseas to more than 130 different markets worldwide.

But that doesn’t mean there aren’t a few bumps in the road ahead. Despite overcoming the worst supply chain disruptions caused by the pandemic - experts believe the semiconductor drought may finally subside this year - the automotive industry could still face some chip shortages as manufacturers continue to play catch up.

On top of this, there’s also the energy crisis, a growing transition towards electric vehicles and the looming presence of autonomous driving technology to consider.

Whatever happens in the future, though, today’s customers are already spoilt for choice; many are increasingly looking for vehicles that offer advanced safety features, connectivity and other high-tech features that will make their journeys a little easier.

“The issue of tight supply chain and lower-than-normal production could have been quite disruptive to loyalty, but the highest-ranking brands excelled by staying focused on keeping owners in the brand,” said Tyson Jominy, Vice President of Data & Analytics at J.D. Power.

According to the J.D. Power 2022 U.S. Automotive Brand Loyalty Study, Toyota ranks highest among mass-market car brands with a 62.2% loyalty rate (Kia came in second with 54.1% of the share).

In the UK, Statista figures show that Ford is currently taking the top spot in terms of loyalty; the comparatively formative Tesla currently sits at the other end of the rankings.

So how are you supposed to keep customers committed to your brand when the marketplace is more competitive than ever? It’s simple: reward their loyalty at every turn.

The best way to do so is with an automotive customer loyalty programme; designed to not only encourage repeat business from customers but to build long-term relationships with them too.

So, fasten your seat belt and check your mirrors, here's everything you need to know.

The benefits of customer loyalty programmes for automotive companies

Customer loyalty programmes can help automotive companies in a variety of ways. Not only do they help increase customer retention and encourage repeat business; they build loyal brand advocates too.

How, exactly?

By helping businesses gather valuable customer data to inform and improve their marketing efforts. The more comprehensive the data, the clearer picture you can paint of your customer base. And by knowing the ins and outs of your demographics, you can create personalised rewards that keep your brand front-of-mind and feel well worth coming back for.

But lifting the bonnet on how the best customer loyalty programmes tick, what sort of tools do you have at your disposal?

The best types of loyalty programmes for automotive companies

Like a well-stocked showroom, automotive companies have a plethora of options when it comes to designing customer loyalty programmes. But the right one for your brand depends entirely on the individual preferences of your target audience, the business model and its objectives. Not sure where to start? Don’t worry, here are just some of the different types of loyalty programmes you can use:

Points-based systems - this is very popular, where customers earn points for each purchase they make or every service they use. These points can then be redeemed for discounts on any future purchases or services, e.g. discounts on parts.

Tiered loyalty - this offers customers different levels of benefits based on their loyalty. For example, customers can move up the tiers based on their purchase history or the number of services they’ve used. So, for example, customers who earn 1,000 points could become ‘Gold Members’ and receive additional perks. This could include things like a priority service, free loaner cars and exclusive invitations to special events.

Membership plans - this is where you offer exclusive benefits to members, rewarding the most loyal customers. This could come in the form of smaller perks such as free roadside assistance, vehicle delivery or oil changes. Alternatively, you could reward your loyal customer base with bigger benefits like special financing options on a brand-new vehicle purchase.

Referral schemes - these programmes offer rewards to customers who refer new customers to the dealership or service centre. Rewards could come in the form of discounts, free services or other personalised incentives.

Personalised rewards - these are tailored to the individual needs and preferences of your customers. The more insight the better, but even with a lack of customer data, you could still track things like billing cycles. By doing so, you can then offer customised incentives and rewards based on previous purchase and service histories. Notice that their MOT is due? Beat them to the punch and offer a free car wash or priority service whilst they’re there.

But this is just the start of what you can do to keep your customers coming back.

Reward your customers and drive sales

Looking for some ideas on how to drive more sales through the business? Here are just some examples of how to turn the average customer into a lifelong fan. Now’s the time to shift gears with your loyalty programme and start reaping the benefits.

Fill their tank and focus on fuel prices

Despite signs that fuel costs are going down, diesel prices remain heavily overpriced.

But it’s not all doom and gloom. In fact, a well-timed customer loyalty programme could help customers with everyday concerns - like the cost-of-living crisis. Not only that, you can do so whilst still driving product sales. For example, Škoda utilised our BHN prepaid Mastercard® to incentivise the purchase of a new or used vehicle. The brand’s customers were rewarded with a card preloaded with £750, £500 or £250 to spend on fuel. And with 20,000 prepaid cards issued, sales exceeded the brand's forecast by 35% and 18.5% respectively in the two years it was run.

Reward customers for booking routine maintenance

More than 40% of auto service shoppers need reactive versus routine maintenance - according to Think With Google - and you can’t plan for that. However, you can still reward them for booking routine service when they do come in. Why not thank them for the fact they’ve chosen you over your competitors with some complimentary services? Whether it’s free tire rotations, battery checks or brake fluid top-offs, delve into the customer data and surprise them with a more meaningful reward.

But what about those future prospects who are still weighing up their options?

Encourage potential customers to take a test drive

Despite a growing shift in online browsing, research suggests there was a 127% surge in test drives at the start of last year; an indication that this is still an important part of the automotive buying journey. But beyond the allure of the shiny new vehicle, there are plenty of ways you can encourage a spin behind the steering wheel.

Digital or physical cards, e.g. a gift card to a local restaurant or shop are always good options to encourage a test drive. But you could also offer raffle entries with experiential prizes, charitable donations in line with current events, e.g. Mind and Mental Health Awareness Month, or traditional incentives like extended warranties. But these are just a few ideas to entice any potential buyers.

Just remember: the key to incentivising potential customers to take a test drive is to offer rewards that are relevant and valuable to them. By doing so, you can encourage potential customers to take the next step in the buying process and potentially convert them into loyal customers. But whatever stage of the journey they’re in, incentives are proven to work in the automotive industry; a recent incentive promotion when BHN worked alongside the VW Group produced a 42% uplift in vehicle sales throughout the campaign - this far exceeded the brand’s expectations.

This is all fair and well when things are working, but how do you keep customers loyal when things don’t go to plan?

Keep your brand reputation intact after recalls 

Product recalls are part and parcel of the automotive industry. And the onset of electric cars isn’t making things any easier - even for the industry giants. In fact, Toyota recently recalled 2,700 of its first mass-produced, all-electric vehicles over concerns about loose wheels.

Don’t worry, we can help keep your brand reputation intact in the unforeseen instance of a product recall. That’s because BHN isn't just an expert in loyalty technology; our own multi-channel solution means we can step in and touch base with vehicle owners in any number of ways, to help out when something goes awry. From a standard form letter or email to an SMS message, we’ll reach every one of your customers so you don't have to stretch your own internal customer service teams. What’s more, our own customer-facing portal means it’s easy to update addresses and contact information - so you’ll always be working with the most accurate data. We also have access to a range of roadside assistance, DVLA and CRM system data. And this means we can find any of those customers who might have slipped through the net, e.g. secondary owners who might not be aware of the issue.

So, what happens after we’ve helped you contact all your customers; how do you handle the process of providing that all-important gesture of goodwill? Our Select incentive platform creates a personalised digital eCode which can be sent directly to your customers. It does so through our online portal (with limited administration from you). Each customer can receive an email or SMS addressed to them with a voucher code redeemable at over 70 high street retailers for that added extra. The perfect way to say “thanks for sticking with us.”

Work with a company you can trust

BHN has been supporting the automotive industry globally for 40 years, combining simple solutions and stand-out propositions with quality brands. In turn, this has helped our partners incentivise action and drive consumer behaviours - now more than ever.

Amidst the cost-of-living crisis, reward-based incentives - either on free fuel or helping with the weekly shop - are helping our partners stand out in a crowded marketplace.

So, whether it’s driving more footfall with test drive incentives, upselling with accessories, service and warranty plans or offering compensation and goodwill gestures, now’s the time to drive the market share and engage your customers with something that’s truly relevant.

But it’s not just your customers that will feel the benefits of meaningful rewards; did you know that BHN partners are growing nearly 45% faster than the industry average? So, If you want to optimise your customer loyalty programme for 2023 and beyond, it’s time to talk to the experts.

Just drop our team a message or give us a call: 020 8142 8688. We’d love to hear from you.